Do you lower the rents on existing tenants when the rents decrease?
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Shamar GreggPro Member
Lender · Chicago, IL · Member since 2020 · 38 posts · 46 votesThe market has definitely changed over the last couple of years across the country. In my area, I’ve noticed that most of my rental properties are pretty much at their rental ceilings. When I started investing with my first property being a four-unit, my goal was simple: maximize cash flow in a perfect world. However, I quickly learned the other side of investing.
What nobody really talks about is the cost of tenant turnover. Painting, cleaning, vacancy, upgrades, and other expenses can often outweigh the additional rental income you expect to generate from increasing rents. Personally, I prefer keeping rents relatively stable and increasing them every two years rather than annually. Tenants tend to respond better, and if I do lose them, I can justify the rental increase based on 24 months of market changes rather than just 12. I would only lower if the market absolutely called for it.
At the end of the day, it all comes down to how the numbers work out. Whether a tenant stays for one year or five, the unit will likely need to be painted and refreshed. I’d much rather paint a unit that has been occupied by a long-term tenant paying slightly below market rent for five years than constantly deal with turnover chasing higher rents for. It's in the math.
14 Replies
- 1dShamar GreggPro MemberLender · Chicago, IL · Member since 2020 · 38 posts · 46 votes
The market has definitely changed over the last couple of years across the country. In my area, I’ve noticed that most of my rental properties are pretty much at their rental ceilings. When I started investing with my first property being a four-unit, my goal was simple: maximize cash flow in a perfect world. However, I quickly learned the other side of investing.
What nobody really talks about is the cost of tenant turnover. Painting, cleaning, vacancy, upgrades, and other expenses can often outweigh the additional rental income you expect to generate from increasing rents. Personally, I prefer keeping rents relatively stable and increasing them every two years rather than annually. Tenants tend to respond better, and if I do lose them, I can justify the rental increase based on 24 months of market changes rather than just 12. I would only lower if the market absolutely called for it.
At the end of the day, it all comes down to how the numbers work out. Whether a tenant stays for one year or five, the unit will likely need to be painted and refreshed. I’d much rather paint a unit that has been occupied by a long-term tenant paying slightly below market rent for five years than constantly deal with turnover chasing higher rents for. It's in the math.
- 1dJosh YoungPro MemberRental Property Investor / REALTOR® / Property Manager · Gilbert, AZ · Member since 2023 · 387 posts · 421 votes
I don’t proactively lower the rent on existing tenants, I have renewed a few recently without raising rent and generally the tenants that I have just renewed have seemed to be appreciative that there wasn’t a small increase. I find that most people don’t want to go through the hassle of moving over a nominal amount of rent, so even if the market rent has dropped a little it’s not enough to make a difference on a renewal, and most tenants don’t know what market rents are unless they are already actively looking for a new place. I suppose if a tenant tried to negotiate on the renewal and they were a great tenant and their negotiation was based on the market rent, then I would consider how quickly I could get it filled and at what rate. I’m mostly in single family though, so I’d be curious to see a response from an experienced multi-family operator in our market. Are your properties single family or multi family?
They are multifamily. So far I haven't lowered any rents but I've been slower to raise them recently. One tenant in particular might be a little high compared to what I'm noticing renting an empty one in the same building is probably going to rent for which is what prompted the question.
- Specialist · PA · Member since 2026 · 31 posts · 5 votes22h
Corey, with multifamily you have a nice advantage here: the vacant unit you're about to lease tells you the real market number for that exact building. Before that tenant's renewal, I'd run the cost of them leaving. If the gap is, say, $75 a month, that's $900 a year, and one month empty plus paint, cleaning and leasing costs usually runs past that. If you do want to meet them partway, a one-time credit keeps the base rent where it is, so the next renewal doesn't start from a lower number. Another option is a longer lease at the current rent, like 15 or 18 months, so it ends in a busier leasing season. And tenants in the same building tend to compare notes, so whatever you do for one will probably come up with the others.
- 19hJohn RacinePro MemberRental Property Investor · Casselberry, FL · Member since 2008 · 125 posts · 74 votes
Corey, there have been some great recommendations here already. @Shamar Gregg's point that turnover costs can outweigh the extra rent, @Josh Young's experience renewing at the same rent, and @Eric Kleinsasser's math on what it costs if that tenant leaves are all worth running. I'd like to offer another perspective.
I'd want to avoid lowering rent too, so I'd look at what else the building can do. One thing to consider in multifamily: can you convert one or more units to mid-term rentals? I'm actively looking at 2+ unit properties where I have that option, because it gives the building another way to earn when long-term rents soften.
Mid-term can do well across unit sizes, as long as you match the unit to the guest:
Smaller units fit travel nurses and executives on assignment.
Mid-size and larger units fit insurance replacement housing, relocations and work crews.
Mid-term rates are higher, but you have to weigh them against what you're adding: furnishings, utilities, internet and some empty days between stays. Across my own units, mid-term has consistently brought in more than long-term would, even after those costs. That only holds where there's real demand nearby, so check that first, along with your city's rules and your insurance.
For your situation, the empty unit is the natural test case. If it works furnished, you've taken a unit out of the soft long-term market instead of lowering rents to compete in it. And it means you're under less pressure on the tenant whose rent is a little high, because you're not depending on the long-term market for every unit.
What's the unit mix in the building, mostly 1-beds and 2-beds or a range?
- Member since 2026 · 149 posts · 42 votes17h
I don't lower mid-lease. If a tenant asks and the market backs them up, I'll trim a little in exchange for a longer renewal. A few months of vacancy costs more than a $50 cut ever will, so I'd rather keep a good tenant at a fair number than chase the top of the market.
- Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 3k+ votes16h
You either conform to market values, or you'll sit with a vacancy. Contact your tenant at least 2 months before renewal date, and have a discussion. Good tenant, pays consistently on time, and good housekeeping, I'd show some flexibility if price is part of the discussion. Have the criteria for possible reduction or 'non-increase' in writing in case it comes up with another tenant. Keep those records!
- Member since 2026 · 252 posts · 33 votes16h
A tenant who pays on time and takes care of the place is hard to replace, so a small trim can feel like a fair thank you. Even just asking how they are doing before renewal can mean a lot to them.
Randy, Bunklow
- 15hRyan BrownPro MemberReal Estate Agent · Louisville, KY · Member since 2022 · 79 posts · 25 votes
Corey, I’ve definitely cut good tenants some breaks on rent to keep them. Someone who pays on time, takes care of the property, and is easy to work with is worth more to me than squeezing out another $100 a month.
That’s $1,200 a year. Between vacancy, cleaning, repairs, and getting someone new in, you can burn through that pretty quickly—and there’s no guarantee the next tenant will be as good.
I wouldn’t automatically lower everyone’s rent whenever the market dips, but I’m absolutely willing to adjust the rent to keep a good tenant. I care more about what the property actually earns over time than getting the highest possible number on the lease.
- 15hSheldon DavidBusiness MemberTechnology · Member since 2026 · 12 posts · 2 votes
Corey, I’d compare the cost of a renewal adjustment with the likely cost of replacing the tenant.
A hypothetical $100 monthly reduction costs $1,200 over a year. One month of vacancy plus cleaning, repairs, and leasing could exceed that, depending on the property. But I’d verify genuinely comparable available rentals before deciding the current rent is above market.
Tenant reliability, the unit’s condition, and local leasing demand belong in that comparison. I wouldn’t assume every renewal needs a reduction, but I’d want the decision grounded in today’s alternatives.
Property IQ - Property Manager · Chandler, AZ · Member since 2026 · 12 posts · 1 vote14h
Corey, I’m with Renters Choice Homes in the Phoenix/East Valley area. Before using the vacant unit as your renewal benchmark, I’d compare condition, upgrades, parking, utilities and any move-in concessions. Two units in the same building can still offer different value.
I’d also separate asking rent from what actually gets leased. A lower advertised rent that still isn’t attracting applicants tells you something different from a signed lease.
How soon is that tenant’s renewal, and how comparable are the two units?
- Member since 2026 · 65 posts · 22 votes13h
I do not lower rent in the middle of a lease, and I do not announce cuts just because asking rents nearby have softened. Asking rent is not leased rent, and the gap is often smaller than the listings suggest.
At renewal, though, I look at it honestly. If a good tenant is now paying clearly above what similar homes are actually renting for, I would rather adjust a little and keep them than win the argument and lose the tenant. A short vacancy, cleaning, and finding a new tenant usually cost me more than a modest adjustment, and the new tenant is an unknown.
The part that matters most is timing. I start that talk well before the lease ends, while the tenant still feels considered, not after they have already found another place and made up their mind.
I don't regularly have conversations about the renewals with long term tenants, I just send them the renewal notice with any changes to the rent/lease terms. I figure that any tenant that is considering moving will just tell me before they move but often times I don't actually know if they are moving because they've been shopping around for cheaper rents.
- Member since 2026 · 10 posts · 2 votes10h
Corey, putting rough numbers on the one tenant you think is a little high can make the call easier. Say the unit is at $1,600 and the market is now $1,500. Matching the market costs you $1,200 a year. If they leave instead, even three weeks empty is about $1,100 of lost rent, before paint, cleaning, listing, and the risk that the next tenant is worse. So a modest trim usually pays for itself if it avoids even a short vacancy.
On not knowing whether they're shopping: sending the renewal 60 to 90 days out with a short "planning to stay?" note gets you that answer while there's still time to adjust, instead of after they've signed somewhere else.
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